Common First Time Home Buyer Mistakes

I recently read an article, that did a poll to find out what the biggest mistakes were from a first time home buyer. Probably the most shocking answer was the top three all dealt with financing/money.

first time home buyer mistake chart

Source

As you can see, the mistakes were not talking to a lender, waiting too long to make an offer, and offering too little on a property.

Not Talking to a Lender

As a first time home buyer, the mistake of not talking to a lender means you are not pre-qualified to make a purchase. This is an important step because you and your agent won’t be wasting time looking at houses you can’t afford.

Even though the fun part is looking at houses, please remember to get serious about your financial future. A lender will get you an accurate credit score and basically run a very thorough check. Since the market has changed, securing a loan is not what is use to be.

I highly recommend you get this step down first. Number one, most agents won’t show you properties unless you are. Number two, once you find the house you want to submit an offer on, its crucial to be completely ready with no set backs.Which is directly related to the second mistake.

Waiting to Make an Offer

This problem is likely due to the state of the real estate market. Working with a well informed agent will likely keep you in the loop.

Simply put: “Buyers think that it’s always a buyers’ market,” says a survey taker.This assertion is especially problematic right now, when the housing market has struggled to overcome tight inventory and skyrocketing home prices that can give a seller the upper hand. – Source

Your agent should be telling you that putting an offer on a home in a timely matter is important. Because of the low inventory , houses in the market are being sold fast. We know affordability and inventory constraints are limiting growth and have known this the entire year.

There were 20,927 sales recorded across Los Angeles, Orange, Riverside, San Bernardino, San Diego and Ventura counties in September, fetching a median price of $460,000, according to CoreLogic DataQuick. Prices increased year-over-year in each of the six counties, rising 6.2 percent in Riverside County.Statewide, according to the California Association of Realtors, sales rose year-over-year for the first time in six months. The state’s median price was $514,320, up 6.1 percent from September 2015.“While higher sales both on a monthly and an annual basis is a glimmer of good news, with most of the homebuying season behind us for 2016, it’s not enough to tip the scales for an increase above 2015’s sales pace,” said CAR president Pat Zicarelli. “With listings continuing to decline and demand still strong, especially at the lower end of the market, affordability will remain a challenge for would-be buyers. – Source

What does data tell you? It means if you are serious about owning a home and find something you like, don’t be afraid to pull the trigger.

Offering Too Little As A First Time Home Buyer

The chance of multiple offers on the home you want are definitely higher right now. I think our post on fair market value comes into play here. Don’t let a few thousand dollars be the difference in accepting an offer. If you really want a certain house, you might have to be ready to go above asking to get the sellers attention. Talk to your real estate agent about putting together the best “clean” offer you can give. If 5 offers come in at asking, how will yours stand out?

TLDR: Trust a True Real Estate Professional

It might be a little ironic, but another mistake on the list is “choosing the wrong agent”.

The article sited other sources of frustration.

  • Zillow & Redfin estimate tools cause headaches in negotiating
  • The buying process is not as easy as what HGTV says
  • Online information can lead to
  • Family & Friends giving wrong advice

The best advice I can give you is to not focus on just one source of information. For example, use the internet as a research tool to help find and interview a good agent.

But the one overarching theme from respondents was the lack of trust first-time buyers have for their agents, whether it be because of outside knowledge that makes them feel like an expert or the fact they didn’t vet an agent before signing on. – Source

If you have picked a great agent, they will guide you in the right direction. This is why I still think using an agent is extremely important. Furthermore, it is just as important as a first time home buyer.

By | 2017-06-06T17:00:19+00:00 November 3rd, 2016|Buyers|0 Comments

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